Possession parted to new entity because of amalgamation attracts eviction under Section 14(1)(b) of the Delhi Rent Control

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Possession parted to new entity because of amalgamation attracts eviction under Section 14(1)(b) of the Delhi Rent Control

 

Shubham Budhiraja[1]

 



Company-A given on lease the property to Bank-B. Due to Govt. Notification, the Bank-B stood merged and became Bank-C, a new entity. Basis this, the Company-A filed a Eviction petition under Section 14(1)(b) on the ground that the original tenant had parted the possession to a new tenant without written consent of the Landlord. The Rent Control allowed the eviction petition however the High Court set aside the eviction. The Hon’ble Supreme Court held as under:[2]

 

1.    A plain reading of this provision shows that the following ingredients must be satisfied before an order of eviction can be passed under Section 14(1)(b): (1) The tenant has sub-let or assigned or parted with the possession of the whole or any part of the premises; and (2) Such sub-letting, assignment or parting with possession has been done without obtaining the written consent of the landlord.

 

2.    In the present case, the amalgamation of HCB with PNB, was effected pursuant to a scheme framed under Section 45 of the BR Act. As a consequence, thereof, all assets, rights, liabilities and obligations of HCB stood vested in PNB and the former ceased to exist

 

3.    In the context of rent control legislation, the effect of amalgamation on the tenancy rights, i.e., whether it results in sub-letting, assignment or parting with possession or not, has been considered by this Court in various judicial pronouncements.

 

4.    The exposition of law emerging from the aforesaid decisions is clear. Section 14(1)(b) of the DRC Act is wide enough to encompass every mode by which possession or tenancy rights of the demised premises are transferred from the original tenant to another entity. Once the possession of the tenanted premises, together with the accompanying rights, passes to an entity other than the original tenant without the written consent of the landlord, and the tenant losing its identity and control of possession of the tenanted premises, Section 14(1)(b) of the DRC Act stands automatically attracted. Therefore, what is material is that – (a) there is a transfer of tenancy rights and possession of the tenanted premises; and (b) such transfer is done without the written consent of the landlord.


[1] Advocate, Delhi High Court [M: +91-9654055315]

[2] CIVIL APPEAL NO. 5714 OF 2012

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